Europe on a Shoestring

Going to Europe for a vacation isn't nearly as inexpensive for Americans as it once was. With skyrocketing exchange rates, Americans need to be smart and savvy to make their trip to Europe not only affordable, but enjoyable. Using a few tips and tricks, you can save yourself - and your wallet - a lot of grief.

If you aren't sure where to visit, check airline specials and be seasonally smart: don't go to Barcelona in the summer and avoid the Swiss Alps in the winter. Then, learn a few words of the local language: please, thank you, hello, goodbye, and the difference between tap and bottled water are all good to know.

Airfare may be the biggest hurdle in coordinating the European vacation of your dreams. First, assess the currency differences between your origin and your destination and then pick a target airline or alliance of airlines. Because British Airways has a good number of English employees, the price that is charged per seat will likely mirror the current value of the British Pound. Similarly, airlines in the United States may have more reasonably priced fares for Americans. For the best of both worlds, use an airline alliance (OneWorld and Star Alliance are two examples) to obtain codeshare flights: pay for a Lufthansa seat through United Airlines with US dollars.

As soon as you've arrived at the airport in Europe, go to an ATM and withdraw local currency. Though fees are associated with this transaction, it is far cheaper and easier than using a conversion service or travelers checks. Be ready to make a decent-sized withdrawl; oftentimes banks charge a flat-fee and a percentage of what is withdrawn.

Where is the best place to stay? Most travelers don't intend to spend 18 or 20 hours per day in their hotel room so choose location over quality. Most European countries have fantastic hostels and in almost all cases, a dormitory-style room that holds six to 10 travelers isn't the only option. Be sure to remember that for a little more money, you can ask for a private room with a private or shared bath. Try to book early: reasonable prices for all different types of rooms are available even during peak season if booked several months ahead.

If a hostel isn't an appealing option, try a bed & bath. Oftentimes, the rooms are as nice as a moderately -priced hotel room and the cultural and linguistic exchanges with the innkeeper (and his family) are well worth your effort and patience. Booking sites make finding a reasonably priced B&B or modest hotel easier than ever. In smaller cities like the Transylvanian city of Brasov, Romania, larger hotels don't exist but many locals are ready and willing to rent part of their house to travelers.

When it comes time to eat, think cheap and pack a lunch. Most hostels and a lot of lower-end hotels are close to grocery stores or convenience stores that have plenty of options when it comes to food. Because Europeans have more public transport options, food is often just minutes away by bus, train, or foot. If you buy glass or plastic bottles with deposits, be sure to return the container to the grocery store to receive the deposit back. In Germany and many other European countries, a bottle deposit can be as much as .50 Euro cents, so it's well worth your effort.

For other food options, keep your eyes and ears open for local farmers' markets or open-air bazaars. Lots of cities have weekend-specific festivals, and many have a weekend reoccurring market with fresh produce, cheese, honey and other local specialties. Be open to trying new types of food and take a hint from the locals when you order. In Romania, for example, a circular bread is a specialty that travelers wouldn't know about unless they were observant, or had asked someone from the area.

If you want to try a restaurant, pick a place out of the tourist-laden areas and one that looks like it caters to locals. If a sign in the front of the restaurant even mentions the words "tourist" or "English", go somewhere else to avoid an expensive meal. Be sure to check with your hotel on the standard tip too; oftentimes, the tip is already included or is unnecessary. Try train stations for cheap, good food but be sure to avoid airports because food can be as much as 10 times the price it would be in the city.

When choosing transportation, don't even think about renting a car. It's far easier - and less expensive - to use local mass transit and your own two feet. The types of transportation vary throughout Europe, but it's quite standard in most mid-to-large cities to have a regional train, and a subway, street train or bus system. In Amsterdam, rent a bike and in Prague, be sure to use the funicular to get to the top of the hill in the city. Eurail has passes that will drastically reduce travel costs, especially if you're visiting multiple countries, are younger than 26, and travel with a group.

Even shopping can be less expensive if you're aware of international travelers' perks. Be sure to ask shopkeepers if they participate in the VAT refund program. Usually, a minimum purchase is required, but you'll receive a check in the mail, a credit to your credit card or even an instant credit for the value of VAT paid, if paperwork is submitted correctly. A word of warning: all paperwork MUST be stamped and duty-free items shown at the airport before your international flight home. Plan on packing all VAT-refunded items in a carry-on and be prepared to show all of these items to customs and duty officials after check-in at the airport but usually before security. Stake out the exact location of the VAT refund center well before you get to the airport to avoid headaches, hassle and possibly running out of time to follow required steps to claim your VAT rebate. Be especially vigilant if flying out of Paris's Charles de Gaulle; VAT refund centers are notoriously hard to find and you'll be very frustrated on your flight home if you do wind up paying 20% VAT on that Louis Vuitton bag you bought on the Champs-Elysees. For the cheapest souvenirs, buy in the cheapest countries: your dollar will go much further in Turkey than in Italy.